- Silver prices gained slightly on the day as weekend tweets from the US President point to a potential peace deal in the days ahead.
Current setup and Live Chart
There was a major development over the weekend that has impacted the silver price and that of other assets trading within the oil shock risk premium regime. A series of Tweets by US President Donald Trump that indicated a peace deal was near shifted market sentiment towards de-escalation. In what has been the strongest signal for peace, the tweets thanked numerous Arab world leaders for their efforts, indicating the sheer scope of effort that has gone into the process.
The events are seen as oil-negative and silver/gold-positive, which is why silver prices opened the week with a huge bullish gap that has yet to be closed. Thus, silver prices remain quite volatile and continue to be impacted by the oil shock risk premium and by inflationary expectations seeping into the producer end of the supply chain, where silver serves as an industrial metal.
Price charts monitored by Reuters indicate that silver rebounded to $78 an ounce this Monday, recovering from earlier losses, as de-escalatory news from the weekend also led to a decline in US bond yields. Reports indicate that the Strait of Hormuz could be reopened as part of the deal. This has pushed the market towards a more risk-on approach, putting the US Dollar on the back foot. However, silver remains well off its earlier 2026 highs.
Silver Price: Macro Drivers
1. Geopolitical events
Silver has been trading in a two-way choppy consolidation in response to the oil shock risk premium. This behavior is not a safe-haven-style of price action. Rather, silver is responding bullishly to de-escalatory headlines (which lower oil prices) and bearishly to further escalation. Buyers are stepping in on dips, and sellers are fading rallies. Right now, the silver price is in a relief rally after the dip to 73.20 on 19 May.
2. Dollar weakness is spurring the relief rally
The de-escalatory headlines over the weekend of 23-24 May 2026 have led to a decline in US bond yields. The US 10-year Treasury Note is down 0.35% on the day. As a result, the US Dollar has been on offer for most of the session. This is boosting precious metals, which are typically paired to the US Dollar (Silver is XAG/USD).
Also, a weaker US Dollar makes silver more attractive to international buyers, leading to greater demand and an eventual uptick in silver prices.
3. Long-term demand remains constructive
Forecasts from major banks and financial institutions still anticipate an increase in global silver demand in 2026. Supportive industrial demand remains intact, as supply has not grown enough to match it.
Price Catalysts for the Week
1. US Dollar/US bond yields direction: Silver price will be supported if US bond yields and the US Dollar weaken. Risk-on sentiment drives investment flows away from the US Dollar and from US bonds. Within the oil shock risk premium, silver prices benefit from de-escalatory headlines. On the other hand, escalatory headlines drive risk-off sentiment, which is a headwind for silver prices.
2. Oil prices and inflation expectations: Still staying within the oil shock risk premium, de-escalatory headlines will lead to lower oil prices. For instance, Brent crude was down 8.24% as of writing on Monday, 25 May. Lower oil prices relieve inflationary pressures, improving sentiment towards industrial metals such as silver. Conversely, rising oil prices reignite inflationary pressures, raising expectations that central banks will tighten financial conditions, which puts pressure on silver.
3. Investor positioning: Silver’s price action for 2026 has demonstrated unprecedented volatility. Price swings can become outsized due to silver’s high beta. If investor positioning is large, it can lead to exaggerated price swings in either direction. Silver price remains in a choppy two-way consolidation.
Silver Price: Forecast Scenarios
Base Case: a moderately bullish scenario as silver looks to consolidate recent gains. The range remains broad, and with the week starting amid easing geopolitical tensions, a limited upside move could be on the cards.
Bull Case: Silver needs a strong bullish catalyst to push higher; a further decline in oil prices, improved demand, and ongoing dollar weakness are potential catalysts. Silver will then have a chance to aim for the 2026 highs set earlier in the year.
Bear Case: if there is a sudden escalation in the geopolitical space, US bond yields will rise as inflationary expectations return. This will lead to a stronger dollar, which places headwinds on silver. Further CPI and PMI data showing the impact of higher input prices on business conditions in the manufacturing sector could lead to a further correction in the silver price.
Takeaway: Silver still retains long-term upside potential. But in the near term, it remains vulnerable to energy prices, US bond yields, inflationary expectations, and Fed interest rate projections.
Silver Price: Technical Outlook
The bounce from the 73.76 support has met resistance at the 78.84 intraday barrier. Further recovery can only come via a break of this barrier, which would allow a push towards the 83.79 resistance and the prior high of 17 April. The 50% Fibonacci retracement of the 29 January – 23 March low at 90.04 serves as the next upside target, followed by the 61.8% Fibonacci retracement and 2 March high at 96.60.
On the other hand, a further correction follows a breakdown of the 73.76 support, which brings in 71.01 as the next downside target. A subsequent move to the south will first challenge the 23 March low and the psychological support at 67.00, leaving the 63.98 low of 6 February as the next target for the bears if the decline is more extensive.
